After all the fear and weak hands selling gold and silver, the metals appeared to bottom on Wednesday. As we have detailed for weeks the 1500 level was the key and the recent action suggests that we are correct.

On Wednesday, gold held 1500 with a couple of pushes below but ultimately held and closed above the key 1500 level. More impressive was gold did not experience a dead cat oversold bounce, it had a soft rally showing a lot of strength holding key support.

Looking at the action in the metals the fact that the rally was not a spike higher, but a battle to hold the key support suggests this rally is not over and a run higher is still in the cards. This morning gold is trading at 1512 December futures and again reminding you that the key level to watch is 1500. We remain long and bullish until proven otherwise.

Todd Horwitz
Chief Strategist